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Business Reporter
Delta Corporation says there is no position yet regarding The Coca-Cola Company’s (TCCC) intention to terminate its bottler’s agreement with the local beverage maker following shareholding changes at Delta’s South African parent firm, SABMiller.

TCCC had indicated it could end its franchised bottler’s agreement with Delta, and African countries, after global beverages giant, AB Inbev’s takeover of SABMiller last year.

Delta said yesterday it would close the issue in the 2018 financial year. “There is nothing to talk about really, as there have been no new developments. We are still negotiating. It is still a matter between AB Inbev and Coca-Cola.

“Whatever happens, as management we will make sure shareholder value is preserved,” said chief executive Pearson Gowero yesterday at an analysts briefing.

The Coca-Cola Company issued a notice of intention to terminate the Bottler Agreements with Delta and its associate Schweppes Zimbabwe Limited. In terms of TCCC and AB InBev’s intention to restructure interests, Delta said negotiations are underway. “However, there is no position yet on Zimbabwe,” the group reported yesterday.

During the presentation of its 2017 annual financial results Delta said that one of the company’s key focus areas for 2018 would be “resolving the bottling franchise matter.”

Delta, which has been recording declines in revenue, volume and profits, said revenue for the year to March 31, 2017 declined 10 percent to $483 million while earnings before interest and tax retreated by 15 percent to $82 million.

Delta said EBITDA was down 13 percent to $102 million while attributable income was lower by a similar margin at $69,9 million for 2017 from $80 million the prior year.

For reportable segments, sorghum beer contributed the biggest income at $35 million, followed by lager beers at $22 million and sparkling beverages, which brought in $14,2 million. Other segments marginally improved on prior year at $9,8 million.

This came on the back of a 6 percent fall in volumes, the largest decline recorded in soft drinks at 11 percent, followed by lagers at 7 percent and sorghum beer 3 percent. Resultantly, Delta’s earnings per share also fell by 15 percent to 5,7 cents.

Delta declared a final dividend of 2,45 cents per share, following an interim dividend of 3 cents per share, representing a 16 percent improvement on the prior year. The group’s total assets grew to $704 million from $699 million in 2016.

Going forward the group said that focus will also fall on driving its top-line, given the projected improved agricultural and mining output, managing value chain costs against unsustainable pricing of cereals and intensifying market facing activities.

Delta said it would also maintain sound industrial relations in an environment of focused cost control and but has no major capital projects, prioritising replacements.